3 Reasons to Buy F5 Networks

In our series "3 Reasons to Buy/Sell," Motley Fool analysts take a look at companies both from the bear and the bull side so investors can weigh out its opportunities and threats. In this edition, senior technology analyst Eric Bleeker examines three reasons to buy F5 Networks. While investors typically have to pay a P/E premium for growth stocks like F5, this company has a P/E around 28. Revenue grew around 22% last quarter, and F5 Networks will continue to expand into key growth markets. The business has a significant moat in load balancing and has successfully fended off attempts by Cisco to get into this space. As the company is 33% off its 52-week high and being thrown out with other networking stocks and tech hardware plays, it could prevent a compelling long-term value, especially if it's sold off after earnings tomorrow. To see Eric's full thoughts, watch the following video.

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The more it goes down due to short term worries - such as the possibility of temporarily weak telecom equipment sales bringing down sales growth last quarter - as someone who's looking to buy and own the stock for 5 years plus, the more I'd like to buy. If I can get a stock cheaper and don't feel like its long-term outlook has been affected, I'd like to make this trade-off.